Author - OTI

On Track Innovations Ltd. Reports Third Quarter 2019 Financial Results

Rosh Pina, Israel – November 6, 2019 – On Track Innovations Ltd. (“OTI”) (OTCQX: OTIVF) (the “Company” or “OTI”), a global provider of near field communication (NFC) and cashless payment solutions, today provided a business update and announced financial results for the nine months and third quarter periods ended September 30, 2019.

Highlights

  • Revenues of $3.9 million in the third quarter, of which 32% were from a recurring revenue source.
  • Continued tight control over operating expenses, which decreased by 20% compared to the third quarter of last year.
  • During the first nine months of 2019, delivered globally more than 20,000 advanced contactless readers to the smart ATMs market, more than 8,000 advanced payment readers to the Russian market, and more than 1,000 advanced payment systems to the Japanese unattended retail market.

Management Commentary

Mr. Assaf Cohen, OTI’s Interim CEO, commented, “I am pleased to announce that we have hired a new CEO, Yehuda Holtzman who brings to OTI a strong sales background and whose initial goals will be to grow OTI’s revenue and margins.”

Following OTI’s sale of its MediSmart division in the fourth quarter of 2018, the financial results of MediSmart are included as discontinued operations and all the prior periods’ information has been reclassified to conform with the current period’s presentation.

Third quarter 2019 financial results summary

  • Total revenue in the quarter was $3.9 million. This is compared to $6.1 million in the same year-ago quarter and $4.1 million in the prior quarter.
  • Recurring revenues were $1.2 million (32% of total revenues), compared to $1.3 million (22% of total revenues) in the third quarter of 2018.
  • Gross profit in the quarter was $1.7 million, or 44% of revenues, compared to $3.2 million, or 53% of revenues, in the third quarter of 2018.
  • Operating expenses totaled $2.8 million in the quarter, significantly reduced when compared to operating expenses of $3.5 million in the same year-ago quarter. Operating expenses for the quarter ended September 30, 2019 included a gain of $0.3 million related to the sale of a building by OTI’s South African subsidiary.
  • Loss from continuing operations was $1.2 million, compared to loss of $0.2 million in the same year-ago quarter.
  • Net loss was $1.2 million, or loss of $0.03 per share, compared to a net loss of $0.2 million, or loss of $0.00 per share, in the same year-ago quarter. Net loss in the prior quarter amounted to $0.9 million, or loss of $0.02 per share.
  • Adjusted EBITDA loss from continuing operations was $1.1 million in the quarter, compared to adjusted EBITDA of $0.0 million in the same year-ago quarter. Adjusted EBITDA loss in the prior quarter was $0.4 million.
  • As of the end of the quarter, the company had cash and cash equivalents and short-term investments of $5.3 million.

Conference Call

Management will host a conference call for investors at 9:00 a.m. Eastern Time on Monday, November 11, 2019, to discuss the financial results, provide a corporate update, and conclude with a recorded Q&A session.

Investors and analysts are encouraged to submit questions they would like the Interim CEO to address on the call. Please submit any questions to oti_questions@gkir.com by Thursday, November 7, 2019 at 5:00 p.m. Eastern time.  OTI intends to hold conference calls in this format during the CEO transition phase.

To listen, please use the following dial-in information:

U.S. Dial-in: 1-888-317-6002

International Dial-in: +1-412-317-5245

Webcast: https://www.webcaster4.com/Webcast/Page/1720/30987

Please dial in a few minutes before the start of the call and request to join the “On Track Innovations Earnings Conference Call” to ensure timely participation.

The conference call will be available for replay by clicking here and via the investor relations section of the company’s website.

 

About On Track Innovations Ltd

On Track Innovations (OTI) is a global leader in the design, manufacture, and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment, automated retail and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel. For more information, visit www.otiglobal.com.

Investor Relations Contact:

Gavriel Frohwein

GK Investor & Public Relations

+1 646 688 3559

oti@gkir.com

 

 

Safe Harbor / Forward-Looking Statements

This press release contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,” “look forward,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “believe,” “should,” “can” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss, among others: the Company’s recurring revenue and long-term strategy. Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are stated under the captions “Risk Factors” in our most recent Annual Report (Form 10-K) and other known and unknown uncertainties and risk factors including those detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements. The reader is cautioned not to place undue reliance on forward-looking statements.

Use of Non-GAAP Financial Information

This press release contains certain non-GAAP measures, namely, adjusted EBITDA from continuing operations, or adjusted earnings from continuing operations before interest, income tax, depreciation and amortization. Adjusted EBITDA from continuing operations represents earnings before interest or financing expenses, income tax, depreciation and amortization, and further eliminates the effect of patent litigation expenses, stock-based compensation expense and other (gain) expenses, net. Patent litigation expenses are presented only at the end of each year, as we do not consider their impact on quarterly results to be material. OTI believes that adjusted EBITDA from continuing operations should be considered in evaluating the Company’s operations since it provides a clear indication of the Company’s operating results. This measure should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for the U.S. GAAP results. The non-GAAP measures included in this press release have been reconciled to the U.S. GAAP results in the tables below.

 

ON TRACK INNOVATIONS LTD.

RECONCILIATION OF NON-GAAP ADJUSTMENTThe following table reflects selected On Track Innovations Ltd. non-GAAP results reconciled to GAAP results: (US dollars in thousands)

 

  Three months ended Sept. 30, Nine months ended Sept. 30,
  2019 2018 2019 2018
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
         
Net (loss) income $       (1,210)  $      (184)  $       (3,854)   $        (797)  
Net loss (income) from discontinued operations 36 (42) 279 (228)
Financial expenses, net 93 2 199 129
Depreciation and amortization 308 342 951 1,022
Taxes on income  17 (2) 25 (267)
Total EBITDA FROM CONTINUING OPERATIONS $          (756)    $        116 $        (2,400) $           (141)
Other (gain) expenses, net (335) (335)                          70
Stock-based compensation          6          65             96 180
Total adjusted EBITDA FROM CONTINUING OPERATIONS $        (1,085) $      181 $        (2,639) $         109

 

ON TRACK INNOVATION LTD.INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET(US dollars in thousands)

September 30, December 31,
2019 2018

 

Assets  

Current assets
Cash and cash equivalents $ 3,396 $ 4,827
Short-term investments 1,905 1,078
Trade receivables (net of allowance for doubtful
 accounts of $558 and $555 as of September 30, 2019
 and December 31, 2018, respectively) 2,469 4,530
Other receivables and prepaid expenses 1,602 2,060
Inventories 4,366 3,527
Total current assets 13,738 16,022
Long-term restricted deposit for employees benefit 473 451
Severance pay deposits 404 375
Property, plant and equipment, net             3,693             5,033
Intangible assets, net               246                 241

Right-of-use assets             1,930                 –
 
Total Assets  $ 20,484 $ 22,122

 

 ON TRACK INNOVATION LTD.INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET(US dollars in thousands) 

September 30, December 31,
2019 2018

 

Liabilities and Equity  

 
Current Liabilities  
Short-term bank credit and current maturities
  of long-term bank loans $  2,553 $ 260
Trade payables 4,857 4,712
Other current liabilities 2,286 3,622
Total current liabilities 9,696 8,594
Long-Term Liabilities
Long-term loans, net of current maturities 26 39
Long-term liabilities due to operating leases, net of current maturities 1,204
Accrued severance pay 948 853
Deferred tax liability 393 445
Total long-term liabilities 2,571  1,337
Total Liabilities 12,267   9,931
Commitments and Contingencies
Equity
Shareholders’ Equity
Ordinary shares of NIS 0.1 par value:
Authorized: 50,000,000 shares as of September 30, 2019 and
December 31, 2018; issued: 42,503,076 and 42,473,076 shares as
of September 30, 2019 and December 31, 2018, respectively;
outstanding: 41,324,377 and 41,294,377 shares
as of September 30, 2019, and December 31, 2018, respectively 1,069 1,068
Additional paid-in capital 225,117 225,022
Treasury shares at cost – 1,178,699 shares as of September 30,
   2019 and December 31, 2018 (2,000) (2,000)
Accumulated other comprehensive loss (1,172) (956)
Accumulated deficit (214,797) (210,943)
Total Equity 8,217 12,191
Total Liabilities and Equity $ 20,484 $ 22,122

ON TRACK INNOVATION LTD.INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(US dollars in thousands, except share and per share data)

 

  Three months ended
September 30,
Nine months ended
September 30,
  2019   *2018 2019   *2018
   
Revenues  
Sales  $ 2,631  $ 4,760  $ 7,286  $ 13,353
Licensing and transaction fees 1,234  1,339 3,708 3,997
Total revenues 3,865  6,099 10,994 17,350
Cost of revenues
Cost of sales 2,161 2,870 5,273 8,351
Total cost of revenues 2,161 2,870 5,273 8,351
Gross profit 1,704 3,229 5,721 8,999
Operating expenses
Research and development 840 765 2,528 2,391
Selling and marketing 1,193 1,591 3,798 4,700
General and administrative 1,070 1,099 3,081 3,001
Other (gain) expenses, net (335) (335) 70
 
Total operating expenses 2,768 3,455 9,072 10,162
Operating loss from continuing operations (1,064) (226) (3,351) (1,163)
Financial expenses, net  (93)  (2)  (199)  (129)
 
Loss from continuing operations
before taxes on income (1,157) (228) (3,550) (1,292)
Income tax (expenses) benefit, net  (17) 2  (25) 267
 
Net loss from continuing operations (1,174) (226) (3,575) (1,025)
Net (loss) income from discontinued operations (36) 42 (279) 228
 
Net loss (1,210) (184) (3,854) (797)
 
Basic and diluted net (loss) income attributable to shareholders per ordinary share
From continuing operations (0.03) (**) (0.09) (0.02)
From discontinued operations (**) (**) (**) (**)
$(0.03) $  (**) $(0.09)  $ (0.02)
Weighted average number of ordinary shares
 used in computing basic and diluted net (loss)
 income per ordinary share 41,324,377 41,294,377 41,306,575 41,260,426

* Reclassified to conform with the current period presentation.

** Less than $0.01 per ordinary share.

ON TRACK INNOVATION LTD.INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW(US dollars in thousands) 

Nine months ended September 30,
2019  *2018
Cash flows from continuing operating activities
Net loss from continuing operations  $ (3,575)  $ (1,025)
Adjustments required to reconcile net loss to
net cash used in continuing operating activities:
Stock-based compensation related to options and shares issued
  to employees and others 96 180
Depreciation and amortization 951 978
Deferred tax, net (25) (360)
Gain on sale of property and equipment (328) (25)
Accrued interest and linkage differences, net (48)
Changes in operating assets and liabilities:
Accrued severance pay, net 66 (19)
Decrease in trade receivables, net 1,576 1,377
Decrease (increase) in other receivables and prepaid expenses 395 (255)
Increase in inventories (879) (381)
Increase (decrease) in trade payables 506 (263)
Decrease in other current liabilities (585) (151)
Net cash (used in) provided by continuing operating activities (1,850) 56
Cash flows from continuing investing activities
Purchase of property and equipment (433) (467)
Proceeds from sale of property and equipment 1,102 52
Change in short-term investments, net (978) 1,195
Investment in capitalized certification costs (156) (92)
Proceeds from restricted deposit for employees benefit 10 8
Net cash (used in) provided by continuing investing activities (455) 696
Cash flows from continuing financing activities
Increase (decrease) in short-term bank credit, net 2,636 (3,449)
Repayment of long-term bank loans (261) (979)
Proceeds from exercise of options and warrants 34
Net cash provided by (used in) continuing financing activities 2,375 (4,394)
Cash flows from discontinued operations
Net cash (used in) provided by discontinued operating activities (1,397) 836
Total net cash (used in) provided by discontinued operations (1,397) 836
Effect of exchange rate changes on cash and cash equivalents (277) (187)
 
Decrease in cash, cash equivalents and restricted cash (1,604) (2,993)
 
Cash, cash equivalents and restricted cash – beginning of the period 5,105 7,799
 
Cash, cash equivalents and restricted cash – end of the period $ 3,501 $4,806

* Reclassified to conform with the current period presentation.

 

Read more...

OTI Appoints Yehuda Holtzman as Chief Executive Officer

ROSH PINA, Israel, Nov. 6, 2019  On Track Innovations Ltd. (OTI) (OTCQX: OTIVF), a global provider of near field communication (NFC) and cashless payment solutions, today announced the appointment of Yehuda Holtzman as Chief Executive Officer of OTI effective December 1, 2019Assaf Cohen, OTI’s Interim Chief Executive Officer and OTI’s Chief Financial Officer, will continue to serve as OTI’s Chief Financial Officer from that date.

Mr. Holtzman brings a wealth of experience to OTI, having successfully established, grown and sold three technology companies through his career. From 1998 to 2011, he was President of MobileAccess, a cellular technology company he co-founded and sold to Corning in 2011. Following that, he co-founded and was CEO of ExploreGate, a big Data/AI company, and from 2016, he was CEO of Mobilogy, a provider of mobile lifecycle solutions which was acquired in 2018.

Scott Medford, OTI’s Chairman of the Board, commented, “We are very pleased to welcome Yehuda Holtzman as the new CEO of OTI. Yehuda has a strong track record in growing technology businesses and creating value for shareholders. We are confident that his strong background and solid understanding of customer needs make him the right leader to take OTI to the next level.”

Yehuda Holtzman commented: “I am delighted to join OTI as I have been keenly monitoring the company for several years. OTI’s unique technology and the growing market of cashless payment, means OTI is well-positioned for success.”

About OTI

On Track Innovations (OTI) is a global leader in the design, manufacture and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment and management requirements for automated retail and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel. For more information, visit www.otiglobal.com.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,” “expect,” “look forward,” “intend,” “plan,” “estimate” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss our confidence that Yehuda Holtzman’s strong background and solid understanding of customer needs make him the right leader to take OTI to the next level and that OTI is well-positioned for success. Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are stated under the captions “Risk Factors” in our most recent Annual Report (Form 10-K) and other known and unknown uncertainties and risk factors including those detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements. The reader is cautioned not to place undue reliance on forward-looking statements.

Investor Relations Contact:

Gavriel Frohwein
+1 646 688 3559
oti@gkir.com

Read more...

OTI Transfers the Listing of Its Shares to the OTCQX

ROSH PINNA, Israel, Oct. 31, 2019  On Track Innovations Ltd. a global provider of near field communication (NFC) and cashless payment solutions, today announced that its shares have been qualified and will begin trading on the to trade on the OTCQX® Best Market. On Track Innovations previously traded on NASDAQ.

On Track Innovations will start trading today on OTCQX under the symbol “OTIVF”.  U.S. investors can find current financial disclosure and Real-Time Level 2 quotes for the company on www.otcmarkets.com.

“On Track Innovations joins the OTCQX Best Market, trading alongside more than 400 U.S. and international companies,” said Jason Paltrowitz, Executive Vice President of Corporate Services at OTC Markets Group. “OTCQX is a cost-effective public market that provides investors with transparent trading and timely access to information. We are pleased to welcome On Track Innovations to the OTCQX Market.”

Assaf Cohen, OTI’s Interim Chief Executive Officer, “We look forward to working with the OTC Markets Group. We see this move as an important step which will allow our shares to trade among peers of similar size and enable us to be become visible to US and international investors.”

About OTI

On Track Innovations (OTI) is a global leader in the design, manufacture and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment and management requirements for automated retail and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel. For more information, visit www.otiglobal.com.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,” “expect,” “look forward,” “intend,” “plan,” “estimate” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss our expectations regarding the continuing growth in the future of orders that we receive. Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are stated under the captions “Risk Factors” in our most recent Annual Report (Form 10-K) and other known and unknown uncertainties and risk factors including those detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements. The reader is cautioned not to place undue reliance on forward-looking statements.

Investor Relations Contact:

Gavriel Frohwein
+1-646-688-3559
oti@gkir.com

Read more...

On Track Innovations Ltd. Reports Second Quarter 2019 Financial Results

37% sequential growth in revenue and strong improvement in gross margin

Rosh Pina, Israel – August 7, 2019 – On Track Innovations Ltd. (“OTI”) (NASDAQ: OTIV) (the “Company” or “OTI”), a global provider of near field communication (NFC) and cashless payment solutions, today provided a business update and announced financial results for the second quarter ended June 30, 2019.

 

Highlights

  • Revenues of $4.1 million in the second quarter, growth of 37% compared to the first quarter of 2019 and a decrease of 28% compared to the second quarter of last year.
  • Gross margin at 58% in the second quarter, at a multi-year high, in part due to growing portion of recurring revenue out of the total.
  • Continued tight control over operating expenses which decreased by 6% in the first half of 2019, versus the same period in 2018.
  • Delivered globally more than 10,000 advanced contactless readers to the smart ATMs market, more than 8,000 advanced payment readers to the Russian market, and more than 1,000 advanced payment systems to the Japanese unattended retail market.

 

Management Commentary

Mr. Assaf Cohen, OTI’s Interim CEO, commented, “We are pleased with the recovery in our results in the second quarter. The increase in revenue over the prior quarter gives us confidence that the issue we faced in the U.S. from the impact of tariffs is now behind us, and we have regained our positive momentum. Furthermore, in line with our long-term strategy, the recurring portion of our revenues continues to grow, and this has allowed us to see a solid improvement in the gross margin.”

Mr. Cohen continued, “I would like to wish Mr. Shlomi Cohen, our former CEO, the best of luck in future with all his endeavors and thank him for the years he invested in OTI, in stabilizing the business and advancing its strategy. The Board is working to find a suitable replacement in the coming months.”

Following OTI’s sale of its MediSmart division in the fourth quarter of 2018, the financial results of Medismart are included as discontinued operations and all the prior periods’ information has been reclassified to conform with the current period’s presentation.

Second quarter 2019 financial results summary

  • Total revenue in the quarter was $4.1 million, compared to $5.7 million in the same year-ago quarter. Revenues in the prior quarter were $3.0 million, and current quarter revenues represent a 37% sequential improvement.
  • Recurring revenues were $1.2 million (29% of total revenues), compared to $1.4 million (24% of total revenues) in the second quarter of 2018.
  • Gross profit in the quarter was $2.4 million, or 58% of revenues, compared to $2.9 million, or 50% of revenues, in the second quarter of 2018.
  • Operating expenses totaled $3.2 million in the quarter, compared to $3.3 million in the same year-ago quarter.
  • Loss from continuing operations was $849,000 compared to $399,000 in the same year-ago quarter.
  • Net loss was $899,000, or loss of $0.02 per share, compared to a net loss of $280,000, or loss of $0.01 per share, in the same year-ago quarter. Net loss in the prior quarter amounted to $1.7 million, or loss of $0.04 per share.
  • Adjusted EBITDA loss from continuing operations was $442,000 in the quarter, compared to adjusted EBITDA of $32,000 in the same year-ago quarter. Adjusted EBITDA loss in the prior quarter was $1.1 million.
  • As of the end of the quarter, the company had cash and cash equivalents and short-term investments of $5.7 million.

Conference Call

Management will host an investor conference call at 9:00 a.m. Eastern Time on August 12, 2019, to discuss the financial results, provide a corporate update, and conclude with a recorded Q&A session.

Investors and analysts are encouraged to submit questions they would like the Interim CEO to address on the call. Please submit questions to oti_questions@gkir.com by Thursday, August 8, 2019 at 5:00 p.m. Eastern time.  OTI intends to hold conference calls in this format during the CEO transition phase and expects to return to the live format, upon the appointment of a permanent CEO.

To listen, please use the following dial-in information:

U.S. Dial-in: 1-888-317-6002

International Dial-in: +1-412-317-5245

Webcast: https://www.webcaster4.com/Webcast/Page/1720/30987

Please dial in a few minutes before the start of the call and request to join the “On Track Innovations Earnings Conference Call” to ensure timely participation.

The conference call will be available for replay by clicking here and via the investor relations section of the company’s website.

 

About On Track Innovations Ltd

On Track Innovations (OTI) is a global leader in the design, manufacture, and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment, automated retail and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel. For more information, visit www.otiglobal.com.

Investor Relations Contact:

Gavriel Frohwein

GK Investor & Public Relations

+1 646 688 3559

oti@gkir.com

 

 

Safe Harbor / Forward-Looking Statements

This press release contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,” “look forward,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “believe,” “should,” “can” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss, among others: the Company’s belief that the impact of tariffs is now behind it, and continued positive momentum.  Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are stated under the captions “Risk Factors” in our most recent Annual Report (Form 10-K) and other known and unknown uncertainties and risk factors including those detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements. The reader is cautioned not to place undue reliance on forward-looking statements.

Use of Non-GAAP Financial Information

This press release contains certain non-GAAP measures, namely, adjusted EBITDA from continuing operations, or adjusted earnings from continuing operations before interest, income tax, depreciation and amortization. Adjusted EBITDA from continuing operations represents earnings before interest or financing expenses, income tax, depreciation and amortization, and further eliminates the effect of patent litigation expenses, stock-based compensation expense and other expenses. Patent litigation expenses and other expenses are presented only at the end of each year, as we do not consider their impact on quarterly results to be material. OTI believes that adjusted EBITDA from continuing operations should be considered in evaluating the Company’s operations since it provides a clear indication of the Company’s operating results. This measure should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for the U.S. GAAP results. The non-GAAP measures included in this press release have been reconciled to the U.S. GAAP results in the tables below.

 

ON TRACK INNOVATIONS LTD.RECONCILIATION OF NON-GAAP ADJUSTMENT
The following table reflects selected On Track Innovations Ltd. non-GAAP results reconciled to GAAP results:
(US dollars in thousands)

 

  Three months ended June 30, Six months ended June 30,
  2019 2018 2019 2018
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
         
Net loss $       (899)  $        (280)  $       (2,644)   $        (613)  
Net loss (income) from discontinued operations 50 (119) 243 (186)
Financial expenses, net 37 95 106 127
Depreciation and amortization 323 345 643 680
Taxes on income 3 (141) 8 (265)
Total EBITDA FROM CONTINUING OPERATIONS $       (486) $       (100) $       (1,644) $       (257)
Other expenses 70                       70
Stock-based compensation          44          62             90             115
Total adjusted EBITDA FROM CONTINUING OPERATIONS $        (442) $            32 $         (1,554) $         (72)

 

ON TRACK INNOVATION LTD.INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(US dollars in thousands)

June 30, December 31,
                  2019                     2018

 

Assets  

Current assets
Cash and cash equivalents $     3,575          $     4,827
Short-term investments 2,105                 1,078
Trade receivables (net of allowance for doubtful
 accounts of $564 and $555 as of June 30, 2019
 and December 31, 2018, respectively) 2,793                 4,530
Other receivables and prepaid expenses 1,457                  2,060
Inventories 4,929                  3,527
Asset held for sale 764
Total current assets 15,623 16,022
Long-term restricted deposit for employees benefit 463 451
Severance pay deposits 394 375
Property, plant and equipment, net               3,981                5,033
Intangible assets, net                  262                     241

Right-of-use assets 1,696                –

 

Total Assets

$    22,419 $      22,122

 

ON TRACK INNOVATION LTD.INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(US dollars in thousands)

June 30, December 31,
                  2019                     2018

 

Liabilities and Equity  

 
Current Liabilities  
Short-term bank credit and current maturities
  of long-term bank loans $     2,811 $          260
Trade payables 5,226    4,712
Other current liabilities 2,248 3,622
Total current liabilities 10,285 8,594
Long-Term Liabilities
Long-term loans, net of current maturities 27 39
Long-term liabilities due to operating leases, net of current maturities 1,092
Accrued severance pay 916 853
Deferred tax liability 424 445
Total long-term liabilities 2,459 1,337
Total Liabilities 12,744 9,931
Commitments and Contingencies
Equity

Ordinary shares of NIS 0.1 par value; Authorized:
50,000,000 shares as of June 30, 2019 and
December 31, 2018; issued: 42,503,076 and 42,473,076 shares as
of June 30, 2019 and December 31, 2018, respectively;
outstanding: 41,324,377 and 41,294,377 shares
as of June 30, 2019, and December 31, 2018, respectively 1,069 1,068
Additional paid-in capital 225,111 225,022
Treasury shares at cost – 1,178,699 shares as of June 30,
   2019 and December 31, 2018 (2,000) (2,000)
Accumulated other comprehensive loss (918) (956)
Accumulated deficit (213,587) (210,943)
Total Equity 9,675 12,191
Total Liabilities and Equity  $    22,419 $     22,122

 

ON TRACK INNOVATION LTD.INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(US dollars in thousands, except share and per share data)

Three                    Three months ended June 30, Six months ended June 30,
                  2019                   * 2018                   2019                  * 2018

 

Revenues    
Sales  $2,933  $           4,352  $        4,655  $      8,593
Licensing and transaction fees 1,183 1,387 2,474 2,658
Total revenues 4,116 5,739 7,129 11,251
Cost of revenues
Cost of sales 1,742 2,849 3,112 5,481
Total cost of revenues 1,742 2,849 3,112 5,481
Gross profit 2,374 2,890 4,017 5,770
Operating expenses
Research and development 817 806 1,688 1,626
Selling and marketing 1,320 1,464 2,605 3,109
General and administrative 1,046 1,065 2,011 1,972
Total operating expenses 3,183 3,335 6,304 6,707
Operating loss from continuing operations (809) (445) (2,287) (937)
Financial expenses, net (37) (95) (106) (127)
Loss from continuing operations
 before taxes on income (846) (540) (2,393) (1,064)
Income tax (3)                 141 (8) 265
Loss from continuing operations (849) (399) (2,401) (799)
Net (loss) income  from discontinued operations (50) 119 (243) 186
Net loss $        (899) $            (280) $      (2,644) $       (613)
Basic and diluted net (loss) income attributable to shareholders per ordinary share
From continuing operations (0.02) (0.01) (0.06) (0.02)
From discontinued operations ** ** ** 0.01
   $         (0.02) $            (0.01) $        (0.06) $      (0.01)
Weighted average number of ordinary shares used in computing basic and diluted net (loss) income per ordinary share  

41,300,641

 

41,271,644

 

41,297,526

 

41,243,169

 

*    Reclassified to conform with the current period presentation.

**  Less than $0.01 per ordinary share.

 

ON TRACK INNOVATION LTD.INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(US dollars in thousands)

Six months ended June 30,
                 2019              *  2018

 

Cash flows from continuing operating activities
Net loss from continuing operations  $            (2,401)  $              (799)
Adjustments required to reconcile net loss to
net cash used in continuing operating activities:
Stock-based compensation related to options issued
  to employees and others 90 115
Accrued interest and linkage differences, net (18) 7
Depreciation and amortization 643 680
Deferred tax benefits, net (24) (281)
Gain on sale of fixed assets (2) (17)
Changes in operating assets and liabilities:
Accrued severance pay, net 44 (28)
Decrease in trade receivables, net 1,254 1,051
Decrease in other receivables and prepaid expenses 597 249
Increase in inventories (1,405) (344)
Increase (decrease) in trade payables 585 (567)
Decrease in other current liabilities (540) (528)
Net cash used in continuing operating activities (1,177) (462)
Cash flows from continuing investing activities
Purchase of property and equipment (221) (414)
Change in short-term investments, net (1,190) 1,173
Investment in capitalized product costs (120) (87)
Proceeds from restricted deposit for employee benefits 10
Proceeds from sale of fixed assets 10 17
Net cash (used in) provided by continuing investing activities (1,511) 689
Cash flows from continuing financing activities
Increase (decrease) in short-term bank credit, net 2,747 (80)
Repayment of long-term bank loans (233) (348)
Proceeds from exercise of options 34
Net cash provided by (used in) continuing financing activities 2,514 (394)
Cash flows from discontinued operations
Net cash (used in) provided by discontinued operating activities (1,304) 289
Total net cash (used in) provided by discontinued operations (1,304) 289
Effect of exchange rate changes on cash and cash equivalents 53 (288)
 
Decrease in cash, cash equivalents and restricted cash (1,425) (166)
Cash, cash equivalents and restricted cash-beginning of the period 5,105 7,799
 
Cash, cash equivalents and restricted cash-end of the period $            3,680 $          7,633

 

(*) Reclassified to conform with the current period presentation.

Read more...

OTI Receives Purchase Order For More Than 10,000 Advanced Readers for Global Smart ATM Market

Orders due to be delivered before year-end 2019

ROSH PINNA, Israel, Aug. 5, 2019 /PRNewswire/ — On Track Innovations Ltd. (OTI) (NASDAQ: OTIV), a global provider of near field communication (NFC) and cashless payment solutions, today announced that it has received a new purchase order to deliver more than 10,000 of OTI’s Uno-8 advanced secure contactless NFC readers, for the global Smart ATM market. The orders are due to be delivered before the end of 2019.

Smart ATMs provide uninterrupted, secure, simple and convenient banking services. Adding an OTI EMV certified contactless reader, provides an ATM with the ability to identify the account owner and communicate with their smart devices.

“Including this new purchase-order, OTI has already received orders for over 50,000 advanced readers systems which are being used throughout the world to provide smart ATMs with contactless NFC capabilities. This is an important growth market for us, and we expect these orders will continue to grow in the future,” said Assaf Cohen, OTI’s Interim Chief Executive Officer.

About OTI

On Track Innovations (OTI) is a global leader in the design, manufacture and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment and management requirements for automated retail and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel. For more information, visit www.otiglobal.com.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,” “expect,” “look forward,” “intend,” “plan,” “estimate” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss our expectations regarding the continuing growth in the future of orders that we receive. Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are stated under the captions “Risk Factors” in our most recent Annual Report (Form 10-K) and other known and unknown uncertainties and risk factors including those detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements. The reader is cautioned not to place undue reliance on forward-looking statements.

Investor Relations Contact:

Gavriel Frohwein
+1 646 688 3559
oti@gkir.com

 

SOURCE On Track Innovations Ltd. (OTI)

Read more...

On Track Innovations Ltd. to Release Second Quarter 2019 Financial Results on Wednesday, August 7th, 2019

Recorded Conference Call to be held on Monday, August 12th, 2019 at 9 a.m. EST

ROSH PINNAIsrael, July 31, 2019 /PRNewswire/ — On Track Innovations Ltd. (“OTI“) (NASDAQ: OTIV), a global provider of near field communication (NFC) and cashless payment solutions, will broadcast a conference call on Monday, August 12th, 2019 at 9 a.m. Eastern Time to discuss the results for the second quarter ended June 30, 2019.

The second quarter financial results will be issued in a press release before the market opens on Wednesday, August 7, 2019. Investors and analysts are encouraged to submit questions they would like the interim CEO to address on the call. Please submit questions to oti_questions@gkir.com by Thursday, August 8th, 2019 at 5:00 p.m. Eastern time. OTI intends to hold conference calls in this format during the interim CEO transition phase and expects to return to the live format, upon the appointment of a permanent CEO.

To listen to the call, please use the following information:

Q2 2019 Conference Call and Webcast
Date: Monday, August 12th , 2019
Time: 9:00 a.m. Eastern Standard Time (6:00 am PST)
U.S. Dial-in: ‎ ‎1-888-317-6002‎‎
International Dial-in: + ‎1-‎412-317-5245‎‎
Webcast: https://www.webcaster4.com/Webcast/Page/1720/30987

Please dial in a few minutes before the start of the call and request to join the “On Track Innovations Q2 2019 Earnings Conference Call” to ensure timely participation.

The conference call will be available for replay by clicking here and via the investor relations section of the company’s website.

About OTI

On Track Innovations (NASDAQ: OTIV) is a global leader in the design, manufacture, and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment and management requirements for the Internet of Payment Things (IoPT), wearables, automated retail and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel. For more information, please visit www.otiglobal.com.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,” “may,” “expect,” “intend,” “plan,” “believe” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss our expectations regarding our growth or profitability, reduction of costs and expenses,  plans for our existing and new products and services, penetration of new markets and securing new customers, contributions of our regions to our growth,  strengthening of our balance sheet and delivery long-term shareholder value. Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Forward-looking statements could be impacted by the effects of the protracted evaluation and validation periods in the U.S. and other markets for contactless payment cards, or new and existing products and our ability to execute production on orders, as well as other risks and uncertainties, including those discussed in the “Risk Factors” section and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2018, and in subsequent filings with the Securities and Exchange Commission. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved. Except as otherwise required by law, OTI disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a result of new information, future events or circumstances or otherwise. The reader is cautioned not to place undue reliance on forward-looking statements.

SOURCE On Track Innovations Ltd. (OTI)

OTI Investor Relations Contact

Gavriel Frohwein GK Investor and Public Relations Main: +1-646-688-3559 OTI@gkir.com
Read more...

OTI Receives New Purchase Order for 1,000 Cashless Payment Systems for the Japanese Unattended Retail Market

 ROSH PINNA, Israel, June 13 On Track Innovations Ltd. (OTI) (NASDAQ: OTIV), a global provider of near field communication (NFC) and cashless payment solutions, today announced that it received a purchase order for 1,000 cashless payment systems from Japan via its partner, Billing Systems Cooperation, a leading regional payment service provider.

Commented Shlomi Cohen, CEO of OTI, “We continue to broaden our footprint in the vast Japanese unattended retail market, and with a potential of six million units countrywide the total size of the Japanese electronic vending machine market is very significant for us. This gives us a substantial runway to continue our growth together with our strategic partner. With more than 10,000 OTI systems already operational in the Japanese market, we look at this new order as a reassurance of a continued and growing stronghold in the area.”

The systems ordered included OTI’s UNO Plus EMVco and FeliCa contactless reader as well as the GoBox Multi-Service Telemetry Gateway. OTI’s GoBox is a powerful Machine-to-Machine (M2M) controller, payment gateway, and multi-services enabler for unattended machines, providing innovative new revenue streams for vending operators.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,”  “expect,” “intend,” “plan,” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss our expectations regarding broaden our footprint in the vast Japanese unattended retail market, continue our growth together with our strategic partner and looking at this new order as a reassurance of continued and growing stronghold in the area. Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are stated under the captions “Risk Factors” in our most recent Annual Report (Form 10-K) and other known and unknown uncertainties and risk factors including those detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements. The reader is cautioned not to place undue reliance on forward-looking statements.

Investor Relations Contact:

Gavriel Frohwein

+1 646 688 3559

oti@gkir.com

 

Read more...

On Track Innovations Ltd. Announces Transition in Leadership Team

ROSH PINA, Israel, June 12, 2019 /PRNewswire/ — On Track Innovations Ltd. (Nasdaq: OTIV) (the “Company” or “OTI“), a global provider of near field communication (NFC) and cashless payment solutions, today announced that its Chief Executive Officer (“CEO“) and member of the Board of Directors, Mr. Shlomi Cohen, will step down from the position of CEO by the end of 2019 and will then assume the role of Chairperson of the Board. The Company has initiated the process of recruiting a new Chief Executive Officer.

After 4 years as OTI’s CEO during one of the most challenging times of the Company’s history, Mr. Cohen will be nominated as the OTI’s Chairperson of the Board. In connection with this role, Mr. Cohen will undertake to actively support OTI management and provide other services as the OTI Board may request from him. Subject to approval by the Company’s shareholders, the transition will be effective January 1, 2020.

During the past 4 years, Mr. Cohen has led a turnaround within OTI, focusing on core assets and strengths, while cutting the Company’s debt materially, and increasing gross margins. He has implemented a new strategy for the coming years with more focus on the cashless payment activities and moving from being a product company to a solution company.

“Shlomi has been doing fantastic work in the last few years within OTI and was able to create a dramatic change that we believe will lead OTI into a new era of growth over the coming years,” said Scott Medford, the Company’s current Chairperson of the Board. “I am very pleased that Shlomi accepted our nomination as next Chairperson of the Board. His experience and his knowledge will support the future development of OTI and we expect that a new CEO that will join us before the end of this year, will build on Shlomi’s success and lead OTI to stable profitability and healthy revenue acceleration,” said Mr. Medford. After stepping down from the position of Chairperson of the Board, Mr. Medford is expected to continue to serve as a Director.

About On Track Innovations Ltd
On Track Innovations (OTI) is a global leader in the design, manufacture, and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment, automated retail and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel. For more information, visit www.otiglobal.com, the content of which does not form a part of this press release.

Safe Harbor / Forward-Looking Statements
This press release contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,” “look forward,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “believe,” “should,” “can” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss, among others: the Company’s expectations to recruit a new chief executive officer by the end of 2019, the effectiveness of Mr. Cohen’s role as chairperson of the Board, which is subject to shareholder approval of his terms of compensation, and the expectation that the Company will grow and accelerate revenues. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are stated under the captions “Risk Factors” in our most recent Annual Report (Form 10-K) and other known and unknown uncertainties and risk factors including those detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements. The reader is cautioned not to place undue reliance on forward-looking statements.

Press Contact:

Richard Harris, OTI

Director of Marketing

+972-4-686-8004

press@otiglobal.com

Investor Relations Contact:

Gavriel Frohwein

GK Investor & Public Relations

+1-646-688-3559

oti@gkir.com

Read more...

OTI Continues to Extend Footprint in the Russian Market with Additional PO for 2,000 Advanced Payment Systems

ROSH PINNA, Israel, June 03, 2019 – On Track Innovations Ltd. (OTI) (NASDAQ: OTIV), a global provider of near field communication (NFC) and cashless payment solutions, today announced that it had received another significant order for more than 2,000 advanced payment systems for use in Russian ticketing.

This additional order builds on OTI’s previous success in the significant Russian market, having delivered to date almost 18,000 cashless payment systems.

The Uno EMVco & MIR certified NFC ultra-compact payment platform is explicitly designed to meet the needs of unattended kiosk and self-service payment environments, the system can also be used for Smart Electric Vehicle charging stations, and smart ATMs.

OTI’s CEO Shlomi Cohen commented, “We won this order based on our leading technological capabilities and it is a demonstration of the highest level of security. This important customer has become another key reference for us in Russia, and we look forward to accelerating our momentum in the region over the coming quarters and years.”

MIR approval was granted to OTI in August 2018, enabling Russian consumers to use an OTI cashless payment solution as a convenient way to make payments through unattended automated machines. The Russian national payment system created the MIR payment card at the end of 2015 with the primary objective that sovereign payments would be independent of foreign organizations. In only 4 years, the number of MIR cards issued has grown quickly and currently amounts to over 56 million, over 20% market share, based on data from the Russian Central Bank.

 

About OTI

On Track Innovations (OTI) is a global leader in the design, manufacture, and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment and management requirements for the Internet of Payment Things (IoPT), automated retail and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel.

For more information, visit www.otiglobal.com.

OTI Press Contact:

Richard Harris

Marketing Manager

+972-4-686-8004

press@otiglobal.com

Investor Relations Contact:

Gavriel Frohwein

+1 646 688 3559

oti@gkir.com

 

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,” “look forward,” “intend,” “plan,” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss our expectations regarding our growth, revenues, profitability, accelerating our momentum in Russia over the coming quarters and years,  position in the market, contributions of new or existing regions or markets to our growth, and deliver long-term shareholder value. Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are stated under the captions “Risk Factors” in our most recent Annual Report (Form 10-K) and other known and unknown uncertainties and risk factors including those detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements. The reader is cautioned not to place undue reliance on forward-looking statements.

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OTI Receives Purchase Order for additional 3,000 Advanced UNO 8 Readers for Smart ATM Global Market

ROSH PINNA, ISRAEL — May 14, 2019 – On Track Innovations Ltd. (OTI) (NASDAQ: OTIV), a global provider of near field communication (NFC) and cashless payment solutions, has received a new purchase order to deliver 3,000 of OTI’s Uno-8 advanced secure contactless NFC readers to the global Smart ATM market.

Smart ATMs provide secure, simple, fast convenient and banking, 24 hours a day, seven days a week. Adding an OTI EMV certified contactless reader provides an ATM with the ability to identify the account owner and communicate with their smart devices.

OTI has successfully delivered to date almost 40,000 advanced readers systems and expects to continue delivering significant numbers in the future.

“As this new order demonstrates, we continue to lead the way in enabling ‘smart’ management of globally distributed ATMs payment system,” said Shlomi Cohen, OTI’s Chief Executive Officer.

About OTI

OTI is a global leader in the design, manufacture, and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment and management requirements for the Internet of Payment Things (IoPT), wearables, automated retail, and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel. For more information, visit www.otiglobal.com.

Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “expect,” “anticipate,” “intend,” “plan,”   “will,” “can” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss our expectations regarding continue delivering significate numbers of our Uno-8 advanced secure contactless NFC readers to the global Smart ATM market in the future, our expectations to continue to lead the way in enabling ‘smart’ management of globally distributed ATMs payment system and deliver long-term shareholder value. Because such statements deal with future events and are based on OTI’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of OTI could differ materially from those described in or implied by the statements in this press release. Forward-looking statements could be impacted by the effects of the protracted evaluation and validation periods in the U.S. and other markets for contactless payment cards, or new and existing products and our ability to execute production on orders, as well as other risks and uncertainties, including those discussed in the “Risk Factors” section and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2018, and in subsequent filings with the Securities and Exchange Commission. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved. Except as otherwise required by law, OTI disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a result of new information, future events or circumstances or otherwise. The reader is cautioned not to place undue reliance on forward-looking statements.

OTI Press Contact:

Richard Harris

Marketing Manager

press@otiglobal.com

 

Investor Relations Contact:

Gavriel Frohwein

GK Investor & Public Relations

+1 646 688 3559

oti@gkir.com

On Track Innovations Ltd. Reports First Quarter 2019 Financial Results
Shift of manufacturing to non-tariff zone completed;
Expects to resume sequential revenue growth in the second quarter;

ROSH PINAIsraelMay 7, 2019 /PRNewswire/ — On Track Innovations Ltd. (“OTI”) (NASDAQ: OTIV) (the “Company” or “OTI“), a global provider of near field communication (NFC) and cashless payment solutions, today provided a business update and announced financial results for the first quarter ended March 31, 2019.

Highlights of the quarter

  • Revenues of $3.0 million of which the recurring portion accounted for 43%, versus 26% in the prior quarter; on an absolute dollar basis recurring revenues increased sequentially by 12%;
  • OTI completed the production relocation from China to the Philippines at the end of the first quarter of 2019; and revenues are expected to resume growth in the second quarter;
  • Improvement in the gross margins to 55%, compared with 52% in the same year-ago quarter;
  • Reduction in the expenses: operating expenses totaled $3.1 million in the first quarter, compared to $3.4 million in the same year-ago quarter;
  • Received order for more than 6,000 advanced payment systems to the Russian market;

Management Commentary

Mr. Cohen commented, “As we had expected, our first quarter was weak from the revenue standpoint, as we focused on moving our production out of China to the Philippines, where there is no impact from US tariffs. I recently returned from our new production facility which was up and running as of the beginning of the second quarter. I, therefore, believe that the issue which has affected us for the past two quarters is now behind us and we can look forward to a return of sequential revenue growth in the second quarter and beyond. I am pleased by the high level of gross margins as well as the relative increase in our recurring revenue levels, which sets us up positively as our revenues return to growth. “

Following OTI’s sale of its MediSmart division in the fourth quarter of 2018, the financial results of Medismart are included as discontinued operations and all the prior periods’ information has been reclassified to conform with the current period’s presentation.

First quarter 2019 financial results summary

  • Total revenue in the quarter was $3.0 million, compared to $5.5 million in the same year-ago quarter. The revenues in the quarter were affected primarily by the impact of tariffs implemented by the United States on imports from China, where the Company manufactured its products until the end of the first quarter. Over the past 6 months, OTI has taken steps to relocate manufacturing to the Philippines, and the process was completed at the end of the first quarter of 2019. Additionally, the revenues were also impacted by the lower level of orders from the Asia-Pacific region, compared with the same year-ago quarter.
  • Recurring revenues were $1.3 million (43% of total revenues), compared to $1.3 million (23% of total revenues) in the first quarter of 2018.
  • Gross profit in the quarter was $1.6 million, or 55% of revenues, compared to $2.9 million, or 52% of revenues, in the first quarter of 2018.
  • Operating expenses totaled $3.1 million in the first quarter, compared to $3.4 million in the same year-ago quarter.
  • Loss from continuing operations was $1.6 million compared to $400,000 in the same year-ago quarter.
  • Net loss was $1.7 million, or $0.04 per share, compared to a net loss of $333,000, or $0.01 per share in the same year-ago quarter.
  • Adjusted EBITDA loss from continuing operations of $1.1, compared to an adjusted EBITDA loss of $104,000 in the same year-ago quarter.
  • Positive net cash provided by continuing operating activities totaled $186,000 in the first quarter of 2019, compared to positive net cash provided by continuing operating activities which totaled $591,000 in the same year-ago period.

Conference Call

Management will host an investor conference call at 9:00 a.m. EDT on May 7, 2019, to discuss the financial results, provide a corporate update, and conclude with a Q&A session with participants. To participate, please use the following dial-in information:

U.S. Dial-in: 1-888-317-6002
International Dial-in: +1-412-317-5245
Webcast: https://www.webcaster4.com/Webcast/Page/1720/30371

Please dial in a few minutes before the start of the call and request to join the “On Track Innovations Earnings Conference Call” to ensure timely participation.

The conference call will be available for replay by clicking here and via the investor relations section of the company’s website.

About On Track Innovations Ltd

On Track Innovations (OTI) is a global leader in the design, manufacture, and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment, automated retail and petroleum markets. OTI distributes and supports its solutions through a global network of regional offices and alliances. OTI is the proud recipient of the 2017 AI Award for Best Cashless Payment Solutions Provider – Israel. For more information, visit www.otiglobal.com.

Press Contact:

Richard Harris, OTI

Director of Marketing                          

+972-4-686-8004

press@otiglobal.com

Investor Relations Contact:

Gavriel Frohwein

GK Investor & Public Relations

+1 646 688 3559

oti@gkir.com

 

Safe Harbor / Forward-Looking Statements

This press release contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Whenever we use words such as “will,” “look forward,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “believe,” “should,” “can” or similar expressions, we are making forward-looking statements. For example, we are using forward-looking statements when we discuss, among others: the Company’s expectations to return to sequential revenue growth in the second quarter and beyond, the Company’s belief that the impact of the U.S. tariffs on import from China is now behind it, improvement in profitability, positive trends and 2019 revenue growth.  Additional factors that could cause actual results to differ materially from those anticipated by our forward-looking statements are stated under the captions “Risk Factors” in our most recent Annual Report (Form 10-K) and other known and unknown uncertainties and risk factors including those detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Forward-looking statements are made as of the date of this release, and we expressly disclaim any obligation or undertaking to update forward-looking statements. The reader is cautioned not to place undue reliance on forward-looking statements.

Use of Non-GAAP Financial Information

This press release contains certain non-GAAP measures, namely, adjusted EBITDA from continuing operations, or adjusted earnings from continuing operations before interest, income tax, depreciation and amortization. Adjusted EBITDA from continuing operations represents earnings before interest or financing expenses, income tax, depreciation and amortization, and further eliminates the effect of patent litigation expenses, stock-based compensation expense and other expenses. Patent litigation expenses and other expenses are presented only at the end of each year, as we do not consider their impact on quarterly results to be material. OTI believes that adjusted EBITDA from continuing operations should be considered in evaluating the Company’s operations since it provides a clear indication of the Company’s operating results. This measure should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for the U.S. GAAP results. The non-GAAP measures included in this press release have been reconciled to the U.S. GAAP results in the tables below.

 

ON TRACK INNOVATIONS LTD.

RECONCILIATION OF NON-GAAP ADJUSTMENT

The following table reflects selected On Track Innovations Ltd.

non-GAAP results reconciled to GAAP results:

(US dollars in thousands)

Three months ended March 31

2019

2018

(Unaudited)

(Unaudited)

 Net loss

$      (1,745)

$      (333)

  Net loss (income) from discontinued operations

193

(67)

  Financial expenses, net

69

322

  Depreciation

320

335

  Expenses (income tax benefits)

5

(124)

TOTAL EBITDA FROM CONTINUING OPERATIONS

$        (1,158)

$        (157)

 Stock-based compensation

46

53

TOTAL ADJUSTED EBITDA FROM CONTINUING OPERATIONS

$        (1,112)

$        (104)

 

 

ON TRACK INNOVATION LTD.

INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(US dollars in thousands)

March 31

December 31

2019

2018

Assets

Current assets

Cash and cash equivalents

$      4,014

$       4,827

 Short-term investments

905

1,078

Trade receivables (net of allowance for doubtful

 accounts of $560 and 555 as of March 31, 2019

 and December 31, 2018, respectively)

2,707

4,530

Other receivables and prepaid expenses

1,789

2,060

Inventories

3,964

3,527

Asset held for sale

772

Total current assets

14,151

16,022

Long-term restricted deposit for employees benefit

454

451

Severance pay deposits

387

375

Property, plant and equipment, net

4,013

5,033

Intangible assets, net

241

241

Right-of-use assets

1,381

Total Assets

$    20,627

$     22,122

 

 

ON TRACK INNOVATION LTD.

INTERIM UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

(US dollars in thousands)

March 31

December 31

2019

2018

Liabilities and Equity

Current Liabilities

Short-term bank credit and current maturities

  of long-term bank loans

$          518

$          260

Trade payables

4,937

4,712

Other current liabilities

2,534

3,622

Total current liabilities

$       7,989

$      8,594

Long-Term Liabilities

Long-term loans, net of current maturities

32

39

Long-term liabilities due to operating leases, net of current maturities

857

Accrued severance pay

894

853

Deferred tax liability

426

445

Total long-term liabilities

2,209

1,337

Total Liabilities

10,198

9,931

Equity

Ordinary shares of NIS 0.1 par value: Authorized –

50,000,000 shares as of March 31, 2019 and

December 31, 2018; issued: 42,473,076 shares as

of March 31, 2019 and December 31, 2018;

outstanding: 41,294,377 shares

as of March 31, 2019 and December 31, 2018

1,068

1,068

Additional paid-in capital

225,068

225,022

Treasury shares at cost – 1,178,699 shares as of March 31,

   2019 and December 31, 2018

(2,000)

(2,000)

Accumulated other comprehensive loss

(1,019)

(956)

Accumulated deficit

(212,688)

(210,943)

Total Equity

10,429

12,191

Total Liabilities and Equity

$    20,627

$     22,122

 

 

ON TRACK INNOVATION LTD.

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(US dollars in thousands, except share and per share data)

Three months ended March 31

2019

 * 2018

Revenues

Sales

$              1,722

$           4,241

Licensing and transaction fees

1,291

1,271

Total revenues

3,013

5,512

Cost of revenues

Cost of sales

1,370

2,632

Total cost of revenues

1,370

2,632

Gross profit

1,643

2,880

Operating expenses

Research and development

871

820

Selling and marketing

1,285

1,645

General and administrative

965

907

Total operating expenses

3,121

3,372

Operating loss from continuing operations

(1,478)

(492)

Financial expenses, net

(69)

(32)

Loss from continuing operations before taxes on income

(1,547)

(524)

Income tax (expenses) benefits

(5)

124

Loss from continuing operations

(1,552)

(400)

(Loss) income from discontinued operations

(193)

67

Net loss

$           (1,745)

$            (333)

Basic and diluted net loss attributable to

 shareholders per ordinary share

From continuing operations

$             (0.04)

$           (0.01)

From discontinued operations

   $                    **

$                  **

$             (0.04)

$           (0.01)

Weighted average number of ordinary shares used in computing
basic and diluted net loss per ordinary share

41,294,377

41,214,378

*   Reclassified to conform with the current period presentation.

** Less than $0.01 per ordinary share.

 

ON TRACK INNOVATION LTD.

INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

(US dollars in thousands)

Three months ended March 31

2019

 * 2018

Cash flows from continuing operating activities

Net loss from continuing operations

$              (1,552)

$              (400)

Adjustments required to reconcile net loss to net cash provided by continuing operating
activities:

Stock-based compensation related to options issued to employees and others

46

53

Gain on sale of property and equipment, net

(2)

Accrued interest and linkage differences, net

(12)

14

Depreciation and amortization

320

335

Deferred tax benefits, net

(10)

(124)

Changes in operating assets and liabilities:

Accrued severance pay, net

29

(3)

Decrease in trade receivables, net

1,323

886

The decrease in other receivables and prepaid expenses

264

33

Increase in inventories

(457)

(35)

Increase (decrease) in trade payables

423

(117)

Decrease in other current liabilities

(186)

(51)

Net cash provided by continuing operating activities

186

591

Cash flows from continuing investing activities

Purchase of property and equipment

(115)

(322)

Proceeds from sale of property, plant and equipment

10

Change in short-term investments, net

6

1,164

Proceeds from restricted deposit for employee benefits

10

Investment in capitalized certification costs

(48)

(13)

Net cash (used in) provided by continuing investing activities

(137)

829

Cash flows from continuing financing activities

Increase in short-term bank credit, net

372

33

Repayment of long-term bank loans

(119)

(144)

Net cash provided by (used in) continuing financing activities

253

(111)

Cash flows from discontinued operations

Net cash (used in) provided by discontinued operating activities

(1,231)

244

Total net cash (used in) provided by discontinued operations

(1,231)

244

Effect of exchange rate changes on cash and cash equivalents

(57)

63

Increase in cash, cash equivalents and restricted cash

(986)

1,616

Cash, cash equivalents and restricted cash – beginning of the period

5,105

7,799

Cash, cash equivalents and restricted cash – end of the period

$               4,119

$            9,415

*   Reclassified to conform with the current period presentation.

SOURCE On Track Innovations Ltd. (OTI)

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